Summary
The Future of the Chilean Defense Industry - Market Attractiveness, Competitive Landscape and Forecasts to 2023, published by Strategic Defence Intelligence, provides readers with detailed analysis of both historic and forecast defense industry values, factors influencing demand, the challenges faced by industry participants, analysis of industry leading companies, and key news.
Synopsis
This report offers detailed analysis of the Chilean defense industry with market size forecasts covering the next five years. This report will also analyze factors that influence demand for the industry, key market trends, and challenges faced by industry participants.
In particular, it provides an in-depth analysis of the following -
- The Chilean defense industry market size and drivers: detailed analysis of the Chilean defense industry during 2019-2023, including highlights of the demand drivers and growth stimulators for the industry. It also provides a snapshot of the country’s expenditure and modernization patterns
- Budget allocation and key challenges: insights into procurement schedules formulated within the country and a breakdown of the defense budget with respect to capital expenditure and revenue expenditure. It also details the key challenges faced by defense market participants within the country
- Import and Export Dynamics: analysis of prevalent trends in the country’s imports and exports over the last five years
- Market opportunities:list of the top ten defense investment opportunities over the next 5 years
- Competitive landscape and strategic insights: analysis of the competitive landscape of the Chilean defense industry.
Scope
- The Chilean defense budget values US$2.9 billion in 2018 and registered a CAGR of 4.20% during the historic period 2014-2018.
- However, it is anticipated to increase at a CAGR of 5.80% over the forecast period to value US$3.8 billion in 2023.
- As a percentage of GDP, the country’s defense budget is expected to average 1% over the forecast period. This is primarily due to the country’s plans to procure multirole aircraft, transport aircraft, naval air defense systems, and military helicopters.
- The country’s capital expenditure allocation averaged 27.3% during 2014-2018 and is expected to average of 25.6% over the forecast period. Chile’s homeland security (HLS) expenditure values US$5.3 billion in 2018 and registered a CAGR of 4.66% during the historic period.
- Moreover, it is anticipated to register a CAGR of 2.30% over the forecast period to value US$5.9 billion in 2023.
- The expenditure is primarily driven by the country’s efforts to strengthen its internal security system to combat the rise in organized crime such as drug trafficking, natural calamities, and a threat from the Mapuche community, which is Chile’s largest indigenous ethnic group.
Reasons to buy
- This report will give the user confidence to make the correct business decisions based on a detailed analysis of the Chilean defense industry market trends for the coming five years
- The market opportunity section will inform the user about the various military requirements that are expected to generate revenues during the forecast period. The description includes technical specifications, recent orders, and the expected investment pattern by the country during the forecast period
- Profiles of the top domestic and foreign defense manufacturers . This will provide the user with a total competitive landscape of the sector
- A deep qualitative analysis of the Chilean defense industry covering sections including demand drivers, Key Trends , and latest industry contracts
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Table of Contents
1. Introduction 7
1.1. What is this Report About? 7
1.2. Definitions 7
1.3. Summary Methodology 9
1.4. About Strategic Defence Intelligence 10
2. Executive Summary 11
3. Market Attractiveness and Emerging Opportunities 13
3.1. Current Market Scenario 14
3.1.1. Primary Threat Perception 14
3.1.2. Military Doctrine & Strategy 15
3.1.3. Military Fleet Size 16
3.1.4. Procurement Programs 20
3.1.5. Top Procurement Programs by Value (US$ Million) 2018-2023 22
3.1.6. Social, Political and Economic Environment and Support for Defense Projects 23
3.1.7. Political and Strategic Alliances 24
3.2. Defense Market Size Historical and Forecast 25
3.2.1. Chilean defense expenditure is anticipated to grow at a CAGR of 5.80% over the forecast period 25
3.2.2. Border disputes and military modernization to drive defense expenditure 27
3.2.3. Defense expenditure as a percentage of GDP is anticipated to increase over the forecast period 29
3.3. Analysis of Defense Budget Allocations 31
3.3.1. Capital expenditure allocation expected to increase over the forecast period 31
3.3.2. Capital expenditure expected to increase over the forecast period 33
3.3.3. Others accounted for the largest percentage share of the overall defense budget during the historic period 35
3.3.4. Other segment to account for the highest share of Chile’s defense budget 37
3.3.5. Per-capita defense expenditure expected to increase over the forecast period 41
3.4. Homeland Security Market Size and Forecast 42
3.4.1. Homeland security market expected to grow at a CAGR of 2.30% over the forecast period 42
3.4.2. Drug trafficking, natural disasters, and threats from the Mapuche community to drive the homeland security budget 44
3.4.3. Chile considered at ‘moderate risk’ of a terrorist attack 46
3.4.4. Chile experienced moderate terror activity during the historic period 47
3.4.5. Chile has a terrorism index score of 3.3 49
3.5. Benchmarking with Key Global Markets 50
3.5.1. Chilean defense budget expected to register consistent growth over the forecast period 50
3.5.2. Chilean military expenditure is expected to remain low compared to other leading spenders 52
3.5.3. Defense budget as a percentage of GDP expected to remain low on a global scale 53
3.6. Market Opportunities: Key Trends and Growth Stimulators 54
3.6.1. Top 10 Defense Market Categories by Value (US$ million) - Forecast-Period Projections 54
3.6.2. Physical Security - Critical Infrastructure Protection (CIP) 55
3.6.3. Land-based C4ISR 56
3.6.4. Transport Aircraft 57
4. Defense Procurement Market Dynamics 58
4.1.1. Import Market Dynamics 60
4.1.2. Defense imports maintained large volumes during the historic period 60
4.1.3. The US accounts for most of Chile’s defense imports 61
4.1.4. Missiles, sensors and naval vessels are the main categories of imported military hardware 62
4.2. Export Market Dynamics 63
4.2.1. Aircraft are the main exported defense products 63
5. Industry Dynamics 64
5.1. Five Forces Analysis 64
5.1.1. Bargaining Power of Supplier: Medium 65
5.1.2. Bargaining Power of Buyer: Low 65
5.1.3. Barrier to Entry: Low 65
5.1.4. Intensity of Rivalry: Low to Medium 65
5.1.5. Threat of Substitution: High 65
6. Market Entry Strategy 66
6.1. Market Regulation 66
6.1.1. Offset policy aids the development of the domestic defense industry 66
6.1.2. Foreign direct investment in the defense sector is restricted 66
6.2. Market Entry Route 67
6.2.1. Budgeting Process 67
6.2.2. Procurement Policy and Process 67
6.2.3. The country’s biennial defense exhibition provides an attractive entry route 67
6.2.4. Joint ventures and collaborations provide market entry opportunities 68
6.2.5. Foreign equipment manufacturers enter the market through direct commercial sales 68
6.3. Key Challenges 69
6.3.1. Dependency on copper exports 69
6.3.2. Corruption and the country’s small defense budget can restrict defense sector growth 69
7. Competitive Landscape and Strategic Insights 70
7.1. Competitive Landscape Overview 70
7.2. Key Domestic Companies 72
7.2.1. FAMAE: Overview 72
7.2.2. FAMAE: Products and Services 72
7.2.3. FAMAE: Recent Announcements and Strategic Initiatives 73
7.2.4. FAMAE: Alliances 73
7.2.5. FAMAE: Recent Contract Wins 74
7.2.6. Desarrollo de Tecnologias y Sistemas (DTS): Overview 75
7.2.7. Desarrollo de Tecnologias y Sistemas (DTS): Products and Services 75
7.2.8. Desarrollo de Tecnologias y Sistemas (DTS): Recent Announcements and Strategic Initiatives 76
7.2.9. Desarrollo de Tecnologias y Sistemas (DTS): Alliances 76
7.2.10. Linktronic Radar Systems: Overview 77
7.2.11. Linktronic Radar Systems: Products 77
7.2.12. SISDEF Ltda: Overview 78
7.2.13. SISDEF Ltda: Products 78
7.2.14. SISDEF Ltda: Recent Announcements and Strategic Initiatives 79
7.2.15. SISDEF Ltda: Recent Contract Wins 79
8. Business Environment and Country Risk 80
8.1. Economic Performance 80
8.1.1. GDP Per Capita 80
8.1.2. GDP, Current Prices, US$ Billion 81
8.1.3. Local Currency Unit per US$ 82
8.1.4. Market Capitalization of Listed Companies 83
8.1.5. Market Capitalization of Listed Companies (% of GDP) 84
8.1.6. Exports of Goods and Services (LCU Billion) 85
8.1.7. Imports of Goods and Services (LCU Billion) 86
8.1.8. Goods Exports as a Percentage of GDP 87
8.1.9. Goods Imports as a Percentage of GDP 88
8.1.10. Gross National Disposable Income (US$ Billion) 89
8.1.11. Service Imports as a Percentage of GDP 90
8.1.12. Service Exports as a Percentage of GDP 91
8.1.13. Foreign Direct Investment 92
8.1.14. Net Foreign Direct Investment as a Percentage of GDP 93
8.1.15. Government Cash Surplus/Deficit as a Percentage of GDP (LCU) 94
8.1.16. Mining, Manufacturing, Utilities Output 95
9. Appendix 96
9.1. About SDI 96
9.2. Disclaimer 96
List of Tables
Table 1: Chile Ground Forces Strength 16
Table 2: Chile Navy Strength 18
Table 3: Chile Air Force Strength 19
Table 4: Chile - Ongoing Development and Procurement Programs 20
Table 5: Chile - Future Procurement Programs 21
Table 6: Chilean - Defense Procurement Programs by Value (US$ Million), 2018-2023 22
Table 7: Chilean Defense Expenditure (CLP$ Trillion & US$ Billion), 2014-2023 25
Table 8: Chilean GDP Growth and Defense Expenditure as a Percentage of GDP, 2014-2023 29
Table 9: Chilean Defense Budget Split Between Capital and Revenue Expenditure (%), 2014-2023 31
Table 10: Chilean Defense Capital Expenditure (CLP$ Billion & US$ Million), 2014-2023 33
Table 11: Chilean Defense Budget Split Between Military Services (Army, Navy, Air Force and Others) (%), 2014-2023 35
Table 12: Chile - Defense Budget Breakdown by Service (CPL$ Billion), 2014-2023 37
Table 13: Chile - Defense Budget Breakdown by Service ( US$ Billion), 2014-2023 39
Table 14: Chilean Per-Capita Defense Expenditure (US$), 2014-2023 41
Table 15: Chilean Homeland Security Expenditure (CLP$ Trillion & US$ Billion), 2014-2023 42
Table 16: Terrorism Index, 2018 47
Table 17: Benchmarking with Key Markets - 2014-2018 vs. 2019-2023 50
Table 18: Chilean - 10 Leading Defense Market Categories by Value (US$ Million), 2018-2023 54
Table 19: Chile Budget Formation Timetable 67
Table 20: Chilean - Top Defense Suppliers by Value (US$ Million), 2018-2023 70
Table 21: Competitive Landscape of the Chilean Defense Industry 71
Table 22: FAMAE - Products and Services 72
Table 23: FAMAE - Alliances 73
Table 24: FAMAE - Recent Contract Wins 74
Table 25: Desarrollo de Tecnologias y Sistemas (DTS) - Products and Services 75
Table 26: Desarrollo de Tecnologias y Sistemas (DTS) - Alliances 76
Table 27: Linktronic Radar Systems - Products 77
Table 28: SISDEF Ltda - Products 78
Table 29: SISDEF Ltda - Recent Contract Wins 79
List of Figures
Figure 1: Chilean Defense Expenditure (CLP$ Trillion), 2014-2023 26
Figure 2: Chilean Defense Expenditure (US$ Billion), 2014-2023 26
Figure 3: Chilean GDP Growth vs. Defense Expenditure as a Percentage of GDP, 2014-2023 30
Figure 4: Chilean Defense Expenditure Allocation for Capital and Revenue Expenditure (%), 2014-2023 32
Figure 5: Chilean Defense Capital Expenditure (CLP$ Billion), 2014-2023 34
Figure 6: Chilean Defense Capital Expenditure (US$ Million), 2014-2023 34
Figure 7: Chilean Defense Budget Split Between Army, Air Force, Navy and Others, 2014-2023 36
Figure 8: Chile - Defense Budget Breakdown by Service (CPL$ Billion), 2014-2023 38
Figure 9: Chile - Defense Budget Breakdown by Service (US$ Billion), 2014-2023 40
Figure 10: Chilean Per-Capita Defense Expenditure (US$), 2014-2023 41
Figure 11: Chilean Homeland Security Budget (CLP$ Trillion), 2014-2023 43
Figure 12: Chilean Homeland Security Budget (US$ Billion), 2014-2023 43
Figure 13: Terrorism Heat Map, 2018 46
Figure 14: Terrorism Index, 2018 49
Figure 15: Benchmarking with Key Global Markets: 2014-2018 vs. 2019-2023 51
Figure 16: Defense Expenditure of the World’s Largest Military Spenders (US$ Billion), 2018 and 2023 52
Figure 17: Defense Expenditure as a Percentage of GDP of Largest Military Spenders (%), 2018 53
Figure 18: Physical Security - CIP Market Size (US$ Million), 2018-2023 55
Figure 19: Land-based C4ISR - Networking Market Size (US$ Million), 2018-2023 56
Figure 20: Transport Aircraft Market Size (US$ Million), 2018-2023 57
Figure 21: Chile - Defense Procurements in Terms of Supplier Relationships, 2018 59
Figure 22: Chilean Defense Imports (US$ Million), 2013-2017 60
Figure 23: Chilean Defense Imports by Country (%), 2013-2017 61
Figure 24: Chilean Defense Imports by Category (%), 2013-2017 62
Figure 25: Industry Dynamics - Porter’s Five Forces Analysis 64
Figure 26: Chilean GDP Per Capita, 2015-2025 80
Figure 27: Chilean GDP, Current Prices, US$ Billion, 2015-2025 81
Figure 28: Chilean LCU per US$, 2015-2024 82
Figure 29: Chilean Market Capitalization of Listed Companies (US$ Billion), 2005-2012 83
Figure 30: Chilean Market Capitalization of Listed Companies (% of GDP), 2005-2012 84
Figure 31: Chilean Exports of Goods and Services (LCU Billion), 2005-2014 85
Figure 32: Chilean Imports of Goods and Services (LCU Billion), 2005-2014 86
Figure 33: Chilean Goods Exports as a Percentage of GDP, 2005-2014 87
Figure 34: Chilean Goods Imports as a Percentage of GDP, 2005-2014 88
Figure 35: Chilean Gross National Disposable Income (US$ Billion), 2005-2014 89
Figure 36: Chilean Service Imports as a Percentage of GDP, 2005-2014 90
Figure 37: Chilean Service Exports as a Percentage of GDP, 2005-2014 91
Figure 38: Chilean Foreign Direct Investment (US$ Billion), 2005-2014 92
Figure 39: Chilean Net Foreign Direct Investment as a Percentage of GDP, 2005-2014 93
Figure 40: Chilean Government Cash Surplus/Deficit as a Percentage of GDP (LCU), 2005-2012 94
Figure 41: Chilean Mining, Manufacturing, Utilities Output (LCU Billion), 2005-2014 95
